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Federal Communications Commission FCC 00-194 Federal Communications Commission FCC 00-194 Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matters of ) ) TSR WIRELESS, LLC, et al.,) ) Complainants, ) ) File Nos. E-98-13, E-98-15 v. ) E-98-16, E-98-17, E-98-18 ) U S WEST COMMUNICATIONS, INC., et al., ) ) Defendants. ) ) MEMORANDUM OPINION AND ORDER Adopted: May 31, 2000; Released June 21, 2000 By the Commission: Commissioner Furchtgott-Roth dissenting and issuing a statement; Commissioner Powell concurring and issuing a statement. 1. In this Order, we address five separate formal complaints filed by paging carriers TSR Wireless, LLC (TSR) and Metrocall, Inc. (Metrocall) (hereinafter “Complainants” or “paging carriers”) against local exchange carriers (LECs) Pacific Bell Telephone Company (Pacific Bell), U S West Communications, Inc. (U S West), GTE Telephone Operations (GTE), and Southwestern Bell Telephone Company (SWBT) (collectively “Defendants”). The paging carriers allege that the LECs improperly imposed charges for facilities used to deliver LEC- originated traffic and for Direct Inward Dialing (DID) numbers in violation of sections 201(b) and 251(b)(5) of the Communications Act of 1934, as amended,1 and the Commission’s rules promulgated thereunder. We find that, pursuant to the Commission’s rules and orders, LECs may not charge paging carriers for delivery of LEC-originated traffic. Consequently, Defendants may not impose upon Complainants charges for facilities used to deliver LEC-originated traffic to Complainants. In addition, we conclude that Defendants may not impose non-cost-based charges upon Complainants solely for the use of numbers. We further conclude that section 51.703(b) of the Commission’s rules does not prohibit LECs from charging, in certain instances, for “wide area calling” or similar services where a terminating carrier agrees to compensate the LEC for toll charges that would otherwise have been paid by the originating carrier’s customer. Accordingly, 1 Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (1996); 47 U.S.C. §§ 201(b), 251 (1991 & West Supp. 1999). Federal Communications Commission FCC 00-194 for the reasons set forth below, we grant in part and deny in part Complainants’ claims. We note that the Complainants in this proceeding did not seek compensation for the transport and termination of LEC-originated traffic. Consequently, this order does not address the question of whether or under what circumstances paging carriers are entitled to such compensation. I. BACKGROUND 2. Complainants are Commercial Mobile Radio Service (CMRS) carriers that provide telecommunications services, including one-way paging services. They assert that section 51.703(b) of the Commission’s rules,2 the Commission’s Local Competition Order,3 and Common Carrier Bureau letters4 interpreting these provisions, prohibit incumbent LECs from charging paging carriers for telecommunications traffic that originates on a LEC’s network.5 Complainants seek an order prohibiting Defendants from charging for dedicated and shared transmission facilities used to deliver LEC-originated traffic, DID numbers, and “wide area calling service.”6 Defendants assert that the Commission lacks authority under the Act to adjudicate Complainants’ claims.7 They further argue that because the Complainants are one-way paging 2 47 C.F.R. § 51.703(b). 3 Implementation of the Local Competition Provisions of the Telecommunications Act of 1996, CC Docket No. 96-98, First Report and Order, 11 FCC Rcd 15499 (1996) (Local Competition Order), aff’d in part and vacated in part sub nom., Competitive Telecommunications Ass’n v. FCC, 117 F.3d 1068 (8th Cir. 1997) and Iowa Utilities Bd. v. FCC, 120 F.3d 753 (8th Cir. 1997), aff’d in part and remanded, AT&T Corp. v. Iowa Utils. Bd., 119 S. Ct 721 (1999); Order on Reconsideration, 11 FCC Rcd 13042 (1996), Second Order on Reconsideration, 11 FCC Rcd 19738 (1996), Third Order on Reconsideration and Further Notice of Proposed Rulemaking, FCC 97-295 (rel. Aug. 18, 1997), further recons. pending. 4 Letter from Regina M. Keeney, Chief, Common Carrier Bureau to Cathleen A. Massey, AT&T Wireless Services, Inc. (March 3, 1997) (Keeney Letter); Letter from A. Richard Metzger, Jr., Chief, Common Carrier Bureau to Keith Davis, Southwestern Bell Telephone, DA 97-2726 (Dec. 30, 1997) (Metzger Letter). 5 Metrocall, Inc.’s Brief on the Merits, at 5-6; Initial Brief of TSR Wireless LLC at 8-10, 14-15. 6 “Wide area calling,” also known as “reverse billing” or “reverse toll,” is a service in which a LEC agrees with an interconnector not to assess toll charges on calls from the LEC’s end users to the interconnector’s end users, in exchange for which the interconnector pays the LEC a per-minute fee to recover the LEC’s toll carriage costs. See, e.g., Letter from Gary A. Evenson, Assistant Administrator, Telecommunications Division, Wisconsin Public Service Commission, to James D. Schlichting, Chief, Competitive Pricing Division, Common Carrier Bureau, FCC, February 16, 1998. 7 Initial Brief of Defendants BellSouth, GTE, Pacific Bell, Southwestern Bell Telephone Company, and U S West, Sept. 11, 1998 (Metrocall Defendants’ Brief) at 4-5. The Metrocall Defendants filed joint briefs and pleadings (Metrocall Defendants’ Brief and Metrocall Defendants’ Reply) to respond to Metrocall’s allegations. Metrocall had also filed a complaint on January 20, 1998 against BellSouth Corporation and BellSouth Telecommunications, Inc. alleging the same causes of action as the instant matters (E-98-14). The BellSouth entities had participated in these proceedings until the Commission dismissed Metrocall’s case against them on December 13, 1999. 2 Federal Communications Commission FCC 00-194 carriers, they are not entitled to the benefit of the Commission’s reciprocal compensation regime set forth in the Commission’s rules, and therefore must pay for facilities used to deliver LEC- originated traffic. 3. In the Local Competition Order, the Commission promulgated section 51.703(b), which provides that: “A LEC may not assess charges on any other telecommunications carrier for local telecommunications traffic that originates on the LEC’s network.”8 In adopting this rule, the Commission stated that “[a]s of the effective date of [the Local Competition Order], a LEC must cease charging a CMRS provider or other carrier for terminating LEC-originated traffic and must provide that traffic to the CMRS provider or other carrier without charge.”9 The Order further provided that carriers operating under arrangements that do not comport with the Commission’s mutual compensation principles “shall be entitled to convert such arrangements so that each carrier is only paying for the transport of traffic it originates, as of the effective date of [the Local Competition Order].”10 When the Local Competition Order was appealed to the Eighth Circuit, the court specifically held that sections 2(b) and 332(c) of the Act granted the Commission authority to issue rules of special concern to CMRS providers. Consequently, the court permitted section 51.703 to remain in full force and effect as it applied to CMRS providers.11 Defendants in this proceeding also participated in the appeal of the Eighth Circuit’s holding to the Supreme Court, but did not seek review of the Commission’s rules relating to CMRS carriers. 4. Section 251(b)(5) of the 1996 Act requires all LECs “to establish reciprocal compensation arrangements for the transport and termination of telecommunications.”12 The Commission in promulgating regulations to implement that section determined that CMRS providers such as paging carriers offer “telecommunications” as defined in the Act,13 and that LECs therefore “are obligated, pursuant to section 251(b)(5) … to enter into reciprocal compensation arrangements with all CMRS providers, including paging providers, for the transport and termination of traffic on each other’s networks.”14 The Commission went on to 8 47 C.F.R. § 51.703(b). 9 Local Competition Order, 11 FCC Rcd at 16016. 10 Local Competition Order, 11 FCC Rcd at 16028. The Order took effect on November 1, 1996. The Commission’s conclusions regarding reciprocal compensation were codified as Sections 51.701-17 of the Commission’s rules. 47 C.F.R. §§ 51.701-17. 11 Iowa Utils. Bd. v. FCC, 120 F.3d at 800 n.21, 820 n.39. 12 47 U.S.C. § 251(b)(5). 13 See 47 U.S.C. § 153(43) (defining “telecommunications” as “the transmission, between or among points specified by the user, of information of the user’s choosing, without change in the form or content of the information as sent and received”). 14 Local Competition Order, 11 FCC Rcd at 15997. 3 Federal Communications Commission FCC 00-194 state that because section 251(b)(5) “does not address charges payable to a carrier that originates traffic,” section 251(b)(5) “prohibits charges such as those some incumbent LECs currently impose on CMRS carriers for LEC-originated traffic.”15 5. On January 30, 1997, concerned that LECs would disconnect their interconnection service for failure to pay for LEC-originated traffic notwithstanding the FCC’s regulations, several paging carriers requested that the Bureau “affirm” that section 51.703(b) of the Commission’s rules prohibited LECs from charging CMRS providers, including paging providers, for local telecommunications traffic that originated on the LECs’ networks.16 On March 3, 1997, then-Chief of the Common Carrier Bureau Regina Keeney issued a letter responding to these carriers’ concerns.17 The Keeney Letter restated the Commission’s conclusions from the Local Competition Order, and concluded that because the Act defines the term “telecommunications carrier” to include CMRS providers, “a LEC is prohibited by section 51.703(b) from assessing charges on CMRS providers for local telecommunications traffic that originates on the LEC’s network.”18 6. On December 30, 1997, A.
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